Sensex Slumps 500 Points; Hits Fresh 14 Month Low

Benchmark indices opened the day lower in line with global cues ahead of the crucial US non farm payrolls data which would be the most important piece of information ahead of the US Fed's interest rate decision later this month.

The Sensex was trading with huge losses of 500 points, while the Nifty fell 143 points in trade at 7679 points. Investors remained worried that a strong US non farm payrolls data would prompt the US Fed to hike interest rates for the first time in almost a decade. This prompted a huge sell-off in the Indian markets as a hike in interest rates could lead to an exodus of funds from foreign portfolio investors.

Among the early losers were those from the banking space including the likes of ICICI Bank and IndusInd Bank.

Public sector banking stocks fell sharply after a leading brokerage firm reduced their price targets. Among the early losers from the space were Bank of Baroda, Union Bank and Canara Bank.

Ashok Leyland was trading higher after the Reserve Bank allowed foreign investors to invest up to 40 per cent of the paid up capital in the company.

Cipla was trading higher after an acquisition announced by the company of Hetero drugs. Raymond was trading higher after the company said it plans to invest money to launch products in the West Asian and African markets.

Metal stocks which had shown some signs of recovery on Thursday were once again beaten down in trade. Among the losers were Vedanta, Tata Steel and Hindalco.

Meanwhile, the relief rally seen on Thursday in stocks across Asia did not carry on into Friday with most markets jittery over the US jobs data.

The worries are that if the jobs data in the US is strong it would lead to a rate hike in the US.